The Goodyear Tire & Rubber Company

Good morning. My name is Shelby, and I will be your conference operator today. At this time, I would like to welcome everyone to Goodyear's third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After some opening remarks, there will be a question and answer session. You may register to ask questions at any time by pressing the star 1 on your telephone keypad. you may withdraw yourself from the queue by pressing star 2. Please note this call may be recorded. It is now my pleasure to turn the conference over to Greg Schenck, Senior Director, Investor Relations.

Thank you, Shelby. Good morning and welcome to our third quarter 2024 earnings call. Today on the call, we have Mark Stewart, our CEO and President, and Christina Zamaro, our Executive Vice President and CFO. During this call, we will refer to forward-looking statements and non-GAAP financial measures. Forward-looking statements involve risk, assumptions, and uncertainties that could cause actual results to differ materially from those forward-looking statements. For more information on the most significant factors that could affect future results, please refer to slide 21 of the supporting presentation for today's call and our filings with the SEC. These materials can be found on our website at investor.goodyear.com, where a replay of this call will also be available. A reconciliation of the non-GAAP financial measures discussed on today's call to the comparable GAAP measures is also included in the appendix of that presentation. With that, I will now turn the call over to Mark.

Thank you, Greg, and good morning, everyone. Welcome to our third quarter earnings call. Before we dive into the numbers this morning, I want to take a moment to acknowledge the momentum the Goodyear team has collectively created over the past four quarters. Goodyear Forward is delivering significant and tangible results, both in the bottom line earnings and in being a key driver enabler in our structurally changing the way in which we work and govern the company. In fact, 2024 will mark the first year Goodyear has expanded margins since 2016. excluding the recovery immediately following COVID. As we've discussed with you in the past, since becoming CEO, I have spent time in getting to know and listen to our people, learning the technical and operational aspects of our operations and product development. I've visited our factories, our retail stores, and have directly engaged with our international operations. I've also been meeting with key customers and partners here in the Americas and around the world to hear directly what we're doing well and what we can do better to meet and exceed consumer and customer needs. Developing a deep understanding of where we can leverage our strengths and address our shortcomings as an organization has given me even greater confidence in our ability to transform and to position ourselves for long-term profitable growth particularly in the premium segments of the market. Let's turn to the quarter three results. The third quarter was strong for us in terms of margin expansion. We delivered segment operating income of $347 million. Our SOI margin was 7.2 percent, both higher than last year. To put this in perspective, we have now successfully put together four consecutive quarters of margin growth under the Goodyear Forward Plan, and the actions and the governance we have put in place this year with our robust cadence of manufacturing, engineering, and commercial accountability. This morning, we're building on that momentum by increasing our transformation plan savings targets. We've raised our guidance for 24 Goodyear Forward benefits to $450 million, up $100 million since the start of the year. Additionally, by the end of next year, We expect to deliver a total of $1.5 billion in run rate benefits. That's up from our original target of $1.3 billion, and we will not stop there. We will continue to look for opportunities to deliver beyond our updated targets as well as we create a more efficient, stronger company. Like any plan, we know that while the paths may change, the goal remains the same. Deliver increased value to our customers and our shareholders. We still have much work to do in the face of industry headwinds. Our consumer replacement volume continues to underperform the industry with Tier 4 tires flowing into the majority of our key markets. At the same time, OEM production continues to reset to a lower base. In that environment, I assure you we are absolutely not letting up. I continue to have confidence we will reach our 10% SOI margin target by the end of next year. This takes into consideration both the volume headwinds and what we see today as far as increases in our raw material costs in 2025. Looking at Goodyear Forward, on our last conference call, we discussed in some detail the cost savings and the efficiency contributions of Goodyear Forward. Today, I'll share an update on the work we're doing on the customer and consumer-facing aspects of the business. One of our major priorities as part of Goodyear Forward is elevating Goodyear and our family brands. Our brands have to resonate with consumers and we must be thought of as a premier tire technology leader in the industry. This is the surest path for us to capture value at the high end of the market and create pull across all other segments. One way we are engaging consumers is through our partnerships with some of the most recognizable brands in the world. In September, we partnered with Ferrari on unveiling their new 12-cylinder. If you haven't seen it, this car is truly awesome. It's an awesome machine. It looks like a GT. It drives like a super sports car. This is Goodyear's first fitment on a Ferrari in 30 years. It highlights our renewed commitment to our brand and our premium technology-driven strategy. This is a space where we will need to be positioned, and we continue to partner with on the right halo fitment with pure play technology leaders to showcase our brand and our cutting edge products. We continue to be positioned well and showing technical and marketing strength in our EV fitments around the world as well. Another big part of this renewed engagement with our consumers is increasing our offering of premium SKUs. As an example, in the U.S. during the quarter, we successfully launched the Assurance Weather Ready II, a top-tier power line targeting first and second replacement customers. In this line, we will introduce 60% more SKUs than the predecessor line had. This is very important as it will make the product line competitive with best-in-class Tier 1 premium offerings. Similarly, in early 2025, we will launch an all-new Eagle F1 Asymmetric 6, and Eagle F1 Supersport, combining offering of 150 unique SKUs almost entirely in the 18-inch and above rim sizes. These tire lines have no predecessor in our U.S. market and demonstrate our commitment and our action to expanding in the premium sector of the marketplace. Additionally, the Eagle F1 all-season product line will launch in late 2025 with about 70% more coverage than the predecessor line. We know our customers need to see us as a reliable supplier covering all SKUs in the premium product line offerings. We simply can't just supply a portion of the premier line. That relegates us to a choice number two or even number three in the minds of our dealers. A broader offering that picks up the tail SKUs is crucial to our success. Of course, tail SKUs are highly profitable in their own right, but they're also an important component of our overall value proposition. When we provide the total portfolio, all SKUs will benefit from the consistency we will offer in customer service. Coverage at the premium end of the market is an enormous opportunity for us, and we are committed to making it happen. This is a market segment where, as an organization, Quite frankly, we have not done a good job of maximizing our opportunity across the value chain. This includes designing and producing what our customers want and differentiating our products in the marketplace in that segment. We are actively changing that. This is part of the operational and cultural shift we are making as part of our transformation. Going forward, we will continuously assess market opportunities utilizing the data sets and the analytics, and leverage our global assets for our customers and consumers with one goal in mind, to profitably win. Before I move on to our market-facing strategies, I'd also like to highlight that we have continued to demonstrate remarkable growth in our U.S. retail business. We have just delivered our best performance in more than 15 years, with earnings growth driven by a focus on our value proposition to customers and an increasing customer base in well-known last-mile fleets. This includes converting nearly 50 stores to dual operations, supporting retail customers by day, fleet customers at night. I see a lot of runway ahead of us as we execute on these objectives we've set out and look forward to the leverage and growing our retail operations on a forward basis. While Goodyear Forward continues through the end of next year, you're hearing my emphasis on the actions we're taking to elevate our performance over the long term. We're rebuilding our brand strategy, product strategy, and operations, setting a solid course for the future and a direction that will drive significant opportunities for our business over the long term. Now I'll turn it over to Christina and take you through the financials, and we'll move on to the Q&A. Thank you.